Ask LH: Why Do Data Plans For Tablets Have Cheaper Rates Than Phones?

Hi Lifehacker, I've been wondering why Telstra's data plans for tablets offer significantly better value than data packs for phones. For example an 8GB tablet plan costs about 0.67 cents/MB while the 6GB mobile data pack is 0.98 cents per MB. How is it possible that for the same product we are charged so differently depending on the device used? Thanks, Data Overload

Tablet picture from Shutterstock

Dear DO,

A simple answer is that phone companies can charge whatever they believe the market will bear: there's no legal obligation for the pricing to be consistent or logical. That applies for every single carrier, and there are often strange inconsistencies.

A second important element is that you have to compare like with like. These are the prices for Telstra's tablet plans:

Data Cost/month Cost/MB (cents)
1GB $48 2.44
4GB $56 0.85
8GB $73 0.67
15GB $117 0.68

And these are the prices for mobile data packs:

Data Cost/month Cost/MB (cents)
250MB $5 2.00
1GB $15 1.46
3GB $30 0.99
6GB $60 0.98

Three points to bear in mind when comparing those prices:

  • A tablet SIM only has data credit -- it can't be used for calls or texts. It also can't be used outside Australia. The data pack is an addition to a service which can make calls and send texts.
  • The tablet plan requires you to sign up for a contract (for a minimum of 12 months if you just want the SIM, or 24 months if you're also buying a device which will be paid off over time). Data packs don't require an ongoing commitment in themselves (though the plan they are added to may well do).
  • The rates on both types of plans vary depending on how much data you buy, which can skew the comparison. Comparing 8GB with 6GB makes the tablet plan look cheaper, but if you compared 1GB, the mobile data pack is cheaper. (Note that strangely the 15GB tablet data plan is actually marginally more expensive than the 8GB plan.)

I wouldn't argue Telstra's data plans are cheap in either category, but comparing the per-MB price without looking at other factors, and particularly by comparing different plan sizes, doesn't give the whole picture.

Cheers Lifehacker

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Comments

    It's based on demand. If you have a product that you want to encourage users to buy you give it for a cheaper price (while not losing money). If you have another product which is in higher demand then you can charge a higher price for it and retain users.

    If tablet mobility plans aren't as in demand as phone ones you provide an incentive for individuals to 'purchase' such as a low cost. Lower cost some revenue is better than no revenue.

    Other than that... no reason whatsoever for them to be different prices.

    I read somewhere that Optus allows you to have up to 5 sim cards using the same plan. To me, this seems like a good option (if you have the $10/gigabyte auto top-up).

    Not sure how where you got those tablet plan prices from ... but when I looked at that page the costs were considerably lower than yours above ... for example, the 4Gb plan is $35 (assuming BYOD).

    A more cost effective way to run a data-only SIM is to be a business customer with Telstra (only requirement is to have an ABN which is free to obtain anyway). For example, the $29 plan has a 4Gb monthly allowance rather than the 3Gb for non-business accounts.

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